Living Costs Rise For All Household Types: Australia

All household types saw rises in quarterly living costs in the June 2025 quarter ranging from 0.4 per cent to 1.0 per cent, according to the latest data from the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: 'Employee households had the smallest rise in living costs of all household types this quarter. The last time this happened was in the March 2022 quarter, before mortgage interest rates began rising.

Households with government payments as their main source of income saw the largest rises in living costs this quarter.'

A significant difference between the Living Cost Indexes (LCIs) and the Consumer Price Index is that the LCIs include mortgage interest charges rather than the cost of building new dwellings.

Employee households, whose main source of income are wages and salaries, benefitted most from falling mortgage interest charges, which are a larger part of their spending than for other household types.

'Mortgage interest charges fell 1.4 per cent in the quarter for employee households, as banks cut interest rates for both variable and new fixed rate home loans following the Reserve Bank of Australia's decision to lower the cash rate target in February 2025,' Ms Marquardt said.

Housing and Food and non-alcoholic beverages were the main contributors to the rise in living costs across all household types.

Out-of-pocket electricity costs rose this quarter as the second instalments of both the Commonwealth Energy Bill Relief Fund (EBRF) and State government rebates in Perth were used up by households in the previous quarter. Households in Queensland also contributed to the June quarter rise as they continued to use up the $1,000 State government rebate. Rebates reduce electricity costs for households.

Food and non-alcoholic beverages rose across all household types driven by fruit and vegetables. Strawberries, blueberries, grapes, tomatoes and cucumbers saw price rises following reduced supply, which is typical at this time of year.

The annual rise in living costs across all household types slowed this quarter compared to the March 2025 quarter.

Smaller annual rises in living costs came with a continued slowing in growth for mortgage interest charges and a fall in automotive fuel prices.

'Higher Housing and Food and non-alcoholic beverages prices over the year contributed to rises in annual living costs across all household types,' Ms Marquardt said.

Households with government payments as their main source of income saw the largest annual rises in living costs this quarter due to rises in electricity costs. These households saw a larger impact from the EBRF rebates being used up compared to other households types, which meant a proportionally bigger impact on their out-of-pocket electricity costs.

Annual growth in living costs for Employee households has continued to slow, up 2.6 per cent in the 12 months to the June 2025 quarter, but down from a 3.4 per cent annual rise to the March 2025 quarter.

The most significant contributor to rises in Employee households' living costs was mortgage interest charges. Annual growth in mortgage interest charges has continued to slow, with an annual rise of 4.5 per cent to the June 2025 quarter, down from an 8.8 per cent annual rise last quarter.

The Pensioner and Beneficiary Living Cost Index (PBLCI) measures living costs for age pensioner and other government transfer recipient households. The PBLCI rose 2.9 per cent in the 12 months to June 2025 quarter, compared to an annual rise of 2.1 per cent in the CPI.

Age pensioner and other government transfer recipient households saw larger annual price rises for Housing and Food and non-alcoholic beverages compared to the CPI.

'Government pensions are indexed on 20 September and 20 March by the greater of the rise in the PBLCI and CPI over a six-month period.

'Over the six months between the December 2024 quarter and June 2025 quarter, the PBLCI rose 2.7 per cent while the CPI rose 1.6 per cent,' Ms Marquardt said.